When the Bank of England makes changes to the base rate, this can have an effect on your mortgage, but it depends on the type of mortgage you have:
Different types of mortage
Base Rate Tracker
Base Rate Tracker (your interest rate moves in line with the Bank of England base rate)
Your rate will change on the first day of the month following an announcement about changes to the Base Rate. If you have a Base Rate Tracker mortgage we’ll write to you and let you know what's happened.
If your mortgage is on a fixed rate at the time the Base Rate changes, then your interest rate won't change. Your repayments won't change. The interest rate that you change to at the end of your fixed term may have changed. We’ll advise you of this when your current deal comes to an end.
Your mortgage may be affected. Although the interest rate on your mortgage isn't directly linked to the Bank of England Base Rate (unless it is a Base Rate Tracker - see above), we take it into account amongst a number of other factors when we review our rates every month. If we decide to change the rate on your mortgage, we'll let you know as soon as possible.
See also: If my payment changes, what do I need to do?
Our current variable mortgage rates
The following variable rates for borrowers are effective from 1 September 2016:
Our Standard Variable Rate is 4.49%.
Our Privilege Rate is 4.24%.
Changing your interest rate
If we change the interest rate on your mortgage, we'll let you know at least five weekdays (excluding Bank Holidays) before the change happens. This gives you time to make sure you have the necessary funds in the account to pay the new amount.
If the interest rate on your mortgage changes, your minimum monthly repayments will change from the same month that the new rate becomes effective. For example, if your new rate is effective from the 1st of the month, then your minimum payment for that month will change.
Changes to your monthly repayment
If you pay by:
Your repayment will change automatically so you don't need to do anything.
You'll need to change the repayment amount with your bank/building society.
Changes to interest rates and regular overpayments
If the interest rate changes and you have set up a regular overpayment (for example, you pay a fixed amount above your regular monthly mortgage repayment), we'll continue to collect this from you along with your updated mortgage repayment.
Setting up a regular overpayment
If you can afford to pay more every month, you may be able to make regular overpayments, but it depends on your mortgage.
Check the terms and conditions because there may be early repayment charges. If you're thinking about making an extra payment(s) on your mortgage, please call us on 0800 121 6263 to discuss your options.
Clearing your arrears
If you've arranged to pay an extra amount each month to help clear your arrears, you'll continue to pay this, no matter what happens with the base rate. If you want to change your repayment plan, call us on 0800 121 8765.
If you have a temporary agreement with us to pay less than your contractual monthly repayment, please continue to pay this until our Collections team contacts you.
Interest rate changes and Lifetime mortgages
If the interest rates change, it may have an impact on your Lifetime mortgage, but it depends on the type of Lifetime mortgage you have with us:
There will be no change. Your interest rate is fixed for the entire term of your mortgage.
A change is possible. The interest rate on your mortgage is 'variable' so we can change it ‐ it can go up or down. However, with this type of mortgage, you're not making any monthly repayments ‐ the mortgage, interest and any charges are repaid when your home is sold when you move into long term care, the property is no longer your main residence, or you die.
Any change to the interest rate means that we change the monthly interest we charge on the amount you owe.
Interest rate changes and Offset mortgages
If the rate changes on your Offset mortgage, the amount of mortgage interest will also change. Any savings held in your Offset savings account will continue to offset the mortgage interest and therefore reduce the mortgage interest you pay.
Find out more: Offset mortgage guide
Interest rates for MOREgage customers
If your MOREgage is on a variable rate then your interest rate may change. Although the interest rate on your mortgage isn't directly linked to the Bank of England Base Rate, we take it into account when we review our rates, and we'll write to let you know the details. If your MOREgage is on a fixed rate then your interest rate will not change.
If you have an Unsecured Personal Loan (UPL) linked to your MOREgage account, a rate change may affect you. If the mortgage element is variable (i.e. on our Standard Variable Rate) the mortgage will move in line with any rate changes, however if it is on a fixed rate then your interest rate will not change. If any changes happen, we will write to you with more information.